13th June 2023
The National Audit Office (NAO) published its latest report entitled “Support for innovation to deliver net zero” last week, which scrutinised whether the Government could deliver value for money from its approach to investment in research and innovation to deliver net zero and concluded that further action is needed to ensure that.
Background
The UK Parliament made a commitment in June 2019 for the UK to reach net zero greenhouse gas emissions by 2050. The Government believes that research and innovation will play a vital role in accomplishing this goal.
The NAO report examined whether the Government has the necessary leadership and coordination mechanisms to support its net-zero research and innovation activities and ensure cost-effectiveness in its investment strategy. Specifically, it analysed whether the Government’s work aligns with the Government’s Net Zero Research and Innovation Framework, also known as the Framework, published by the then Department for Business, Energy, and Industrial Strategy (BEIS) in October 2021. The Framework identified 31 challenge areas across seven categories, which include building retrofit and energy efficiency solutions where the government hopes to see significant progress over the next decade as well as promoting sustainable food and biomass production.
The report also examined the Delivery Plan, which the Department for Energy Security and Net Zero (DESNZ) released in March 2023 and which provides a comprehensive overview of public support for net zero research and innovation. This plan outlines a funding allocation of approximately £4.5bn until 2025, including £4.2bn from the latest Spending Review and £0.26bn from the Office of Gas and Electricity Markets (Ofgem).
Government made significant progress but there is more to be done
The NAO found that the Government made some important progress in recent years but that it needs to take further action to guarantee cost-effectiveness in its investments, including the Delivery Plan. On the latter, the NAO called on DESNZ to take prompt action to further strengthen its governance and delivery mechanisms or risk that the Government will not achieve its carbon and economic objectives.
The NAO said that the creation and publication of the Net Zero Research and Innovation Framework by BEIS served to clarify the government’s priorities in achieving net zero and effectively communicated these priorities to external stakeholders. The cross-government Net Zero Innovation Board (the Board) oversaw the development of the Framework. However, the report explained that there is still a lack of clarity regarding the entity responsible for overseeing progress throughout the entire innovation system in the priority areas. It also said that successful support for net zero research and innovation will require the host of departments and public bodies involved to work effectively with their private sector partners, the research community, and investors.
The importance of measuring carbon emissions
Bankers for Net Zero welcome the NAO’s report, especially its recommendation to the Board to specify desired outcomes and what level of failure is tolerable for each of the challenge areas by December 2023 and monitor and publish regular update reports from that date onwards. As an example, the NAO mentioned that this could include the potential for carbon emission reductions and creating business opportunities, including the amount of private investment. This is where Perseus comes in, a programme run by Bankers for Net Zero and Icebreaker One to unlock access to capital by automating GHG reporting for every SME in the country, with an operational pilot by COP28. Perseus has been recognised by the UK Government and included in the Green Finance Strategy as a crucial part of the decarbonisation architecture required to ensure the UK reaches its emissions reduction targets. If you have not engaged with the project yet, you have a unique opportunity to contribute to the creation of assurable ESG data and address the lack of continuity in ESG reporting.
Contact
Elena Pérez Celis,
Head of Policy & Public Affairs
E: elena.perezcelis@bankersfornetzero.co.uk
T: 07522124532
